I explore innovation and privacy via my writing & working with clients around the world as president of Arcadia Communications Lab. I have 30+ years of leadership experience in marketing and communications.

Microsoft Should Build On Its Past, Not Ignore It

With Satya Nadella at the reins for a few months now, and a major developer presentation under his belt, it seems apparent that MicrosoftMicrosoft is going to reinvent itself as a cloud-based, cross-platform software services provider. Like YahooYahoo without Katie Couric, though with its own search, so sorta like GoogleGoogle, too. Like Facebook without the posts or user data, but kinda like Oracle, with a cadre of captive users, only not really. Similar to Apple, but lacking the dedicated hardware users, though lots of folks love Xbox.

Considering it missed almost completely the evolution of its marketplace — and the transformation of its once hegemonic command of computer OS into an island, albeit a huge one — its new strategy means it’s all but starting from scratch. Hence Nadella calls the company “a challenger brand.” The business media love it.

As a marketer, I wonder if it’s missing the boat by a mistaken understanding of 1) the boat, and 2) said miss.

Windows OS didn’t just keep Microsoft afloat over the years, but was arguably why it existed in the first place (with a knowing nod to spreadsheet software). It was so central to everything that Microsoft once did that the company learned to take its functionality and users for granted, approaching both as tools for its reliable financial enrichment. Successive iterations of Windows were dumped on the marketplace every 18 months or so with no compelling purpose other than Microsoft’s routine need to sell new software. Since much of these purchases were made by OEMs, its expectations were regularly fulfilled.

That’s not to say that it didn’t innovate many improvements in UI, but those benefits were usually overwhelmed by the complexities of system upgrades, updates, and software and hardware compatibility. The problem was that little of this constant change was conceived or presented as being particularly user-friendly or good, and its iterations of OS engendered few fans, certainly not many vociferous ones. Given no compelling reason to change OS — as recently as the poorly communicated migration to its otherwise radically innovative “tiles” in the next-to-latest Windows — people found the periodic announcements more burden than opportunity.

This is nowhere more evident than in the 30% of institutional and individual desktops in the US that still run 12 year-old XP. Microsoft has had to turn to bribing users to give it up, offering them $100 discounts on new software, and to extend its support to some large corporate and government users in anticipation of its discontinuation of help for everyone else next week.

So, while this OS cash machine chugged along and the company experimented with other tangential offerings, the marketplace changed: OS and the activities it enabled emerged apart and beyond Microsoft’s reach, as well as smack dab in the heart of where it had once ruled most overtly (Linux, an then Chrome). Search engines, cloud services, mobile platforms and social communities took center stage, leaving Microsoft bereft of a model that allowed it to deliver or co-own such innovation, let alone ways to profit from it.

Like IBM before it, Microsoft ruled its world, only then neglected to innovate the development and marketing of the platform that gave it such authority. Now, it’s not just walking away from that heritage, but “moving faster to recognize a computing world without Microsoft at its heart,” according to one news report.

The problem is that talk about agnostic software or cloud-based whatever makes about as much sense as building a can-opener factory or pursuing a hydroponics business. There are so many talented and inspired people inside Microsoft that it’s actually quite sad that the company might still miss the ultimate (if not only) opportunity against which it has a historic and perhaps unique pathway to success:

Better OS. Different OS. OS that people need. OS that uses more senses. OS for everyday things. Cars. Refrigerators and lamps. Everything else on the planet.

I’m all for nuance and keeping options open, but I wonder whether this isn’t a time for the company to move past doing what the Silicon Valley wags are telling it to do. Skip the language about being a challenger brand, and instead embrace a big and bold goal that challenges not only our expectations, but those of the company’s rank-and-file employees. Act differently…like really differently. Reject the spreadsheet blather about quadrants of competitors and the glib soundbites that pass for analysis on tech companies, and return to the real-world impact that built the company in the first place. Bet the bank on a Manhattan Project-like deliverable, and focus all available hands on making it a reality.

If Microsoft has all but admitted it lost its chance at leadership on the Internet, it could declare that it will be the OS engine of the nascent Internet of Things.

The world doesn’t need a Microsoft that tries to do what its competitors do, no matter how expertly or earnestly. It needs a Microsoft that finally stops taking its past for granted, and upon it builds its future.

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Sustainable, continuous innovation is the name of the game and Microsoft has proved that they are unmatched in achieving this holistic vision. While Google, Apple, and IBM have had a 5 year lead on accessing the intersection of cheap computing, and hardware efficiency, they have failed in having long term strategic vision when it comes to software and developers. IBM purchased Softlayer in attempt to build what Microsoft has done incredibly well. Softlayer has 13 datacenters, Google has for instance, only 8 availability zones at “8 datacenter” locations. Microsoft has 300 datacenters with coverage across 18 zones. It seems like Microsoft was missing opportunities in cloud when Amazon for instance launched it’s compute services but in reality they were strategically waiting for the full stack innovation to come to bear. That along with the Developers, Developers, Developers mindset has shown that they are the true thought leaders in the segment, and Satya Nadella’s comment, “Speed of Light” goes to they very essence of the issue with cloud and mobility. When you ask any developer who has better documentation, Microsoft or Google, it’s hands down Microsoft, by a whole horse length. Microsoft just lapped Google with the Visual Studio development environment and there is no other cloud platform that can compete. Google could spend 50 billion dollars and still not reach the wisdom of Microsoft software engineering and architecture which is why Bill Gates tapped Ray Ozzie to spark and refocus the vision of it’s engineering teams. In the end it’s the same Developers, Developers, Developers strategy that is about empowering the architects and builders of innovative vision. The only thing that Microsoft needs now is a complimentary marketing visionary that can expertly recapture the imagination that has been lost in tech in the past few years. Enterprise has been lost and myered in legacy systems, and we will finally see the transition to “the technology we have been waiting for” across the board. There is nomore exciting time to be a developer, an entrepreneur, a Microsoft employee or a Microsoft shareholder. Microsoft is back, and it’s in it to win it.

Ajay, I share your hope and enthusiasm for Microsoft. I just haven’t seen the Big Picture for its plans yet, but rather lots of parts, many of which you’ve noted. The company is certainly not “back” yet, but there’s no reason to believe it can’t get there.

Ajay: What alternative universe are you living in? MS-DOS was bought (for a song) from Tim Patteson……Multiplan became Excel……Lattice C became Microsoft C…..Powerpoint was purchased….Windows 1 and Windows 2 were both jokes. More recently we’ve had hell on wheels from Windows ME, Windows Vista, and Windows 8. Then there was the HUGE tap dance required to update to Windows 8.1…..a 3.5 gigabyte “patch”. In the 1990′s Microsoft was truly a world class marketing company and a world class monopolist. But Microsoft was never a software company, and it’s certainly NEVER been a software company. Good luck with your expectations about innovation…..or about software!

I live in the universe where I have a diverse technology and business strategy background ranging from SMB IT, building the backbone of the internet at a global Telco, building private clouds pre-amazon, worked in Silicon Valley engaging with Fortune 500 CTO’s and leading start-ups on innovation strategy in enterprise architecture, and converse with more talented people across the technology stack. What’s your world look like? You’re comment that Microsoft was never a software company pretty much proves that you have no clue what you are talking about.

Mary, I’d probably argue that Microsoft did a pretty poor job of marketing, all things considered, insomuch that much of its sales was OEM and, for a good long while, all but guaranteed (as you note). The times it has innovated, such as the radical UI it introduced for its Surface tablets, it spent billions making sure nobody understood or appreciated the change.

This conflicts with what I know about the people inside the business (and what I’ve been told by many, many friends and associates with relationships within the company), which is that the place is chocked full of really smart, creative folks. It’s why I think if the new leadership could give them a truly real, novel goal, that they might actually achieve it.

Ajay, I think Mary’s point is that Microsoft’s innovation was less on the software side (much of it bought, which is historical fact), and more on the business strategy side. Its products were a means to an end, which was ownership of the desktop.

My gut tells me that Microsoft already spends an immense amount of money on ‘listening’ to consumers, but the value of those insights is only as good as 1) the quality of the inquiries, and 2) the merits of the subsequent plans.

As a software developer, the announcements coming from Microsoft’s Build Conference are quite exciting. Before, I was reluctant to dabble in Microsoft technology due to the uncertainty of licensing and legal issues. If I built something using Microsoft Visual Studio, are there string attached to selling the software? Open source always looked more attractive. But now that Microsoft is open sourcing some if its technologies using the Apache 2.0 License, then all the doubts go away. Plus, it wants its OS to drive the Internet of Things. Windows running on every device. How would that work? I don’t know, but I am excited to find out.

Jose, I’m hopeful, too, in that things are certainly not “business as usual” for Microsoft any longer, and much (if not all) of that change is for the better. I think the Internet of Things is a huge opportunity.